If you are an optimistic kind of person, you might not have thought about what would happen if a disaster were to strike. It would be lovely to be able to say that this is all fine, but in reality, you need to be prepared for the worst while you continue to hope for the very best.
In financial terms, what this means is that you need to create a safety net that will help you and your family should anything bad happen. So, if you get put out of work, lose your house or have to face large medical bills, your safety net is there to cushion the blow.
Building your safety net will take some time but once you have saved a sufficient amount, you can continue to save up for other things or start investing. However, your safety net isn’t just about saving up, it is also about getting the right insurance and knowing who you can rely on should a disaster ever actually happen.
Save up an emergency fund
Creating your emergency fund might feel like something you need to do as fast as possible, but you need to consider that saving takes time and over saving will put undue stress on you and your family. Instead, set your target fairly low to begin with, around $250 – $500. Once you have reached this number, you can start to think about how many months’ expenses you would like to have in savings and then continue building up from there.
Starting with a high number can be really off-putting and if you are in the process of turning your financial situation around after repaying a large debt, you might struggle to save each week. One solution is to set a small goal for savings and then automate the transfer from your regular account to your savings account. This way you won’t notice so much that the money has gone and you won’t need to do anything consciously. You should also automate your bills for that matter.
Get insurance to cover your needs
If you are a happy-go-lucky person, insurance might sound like a waste of money. But, if you want to make sure that you are covered, insurance is the best way to be able to afford everything you may need from damage repairs to medical attention.
There are four different types of insurance that everyone should have: health insurance, life insurance, property insurance and auto insurance. You might also want to consider other types of insurance such as pet insurance to cover any medical bills your furry friends may incur and travel insurance when you go on vacation.
Of the four types of insurance you need, many people are skeptical about life insurance. While you might not necessarily need it if you are young and single if you have a family the only question you need to ask is how will your family cope without you to persuade you that life insurance is a smart move. If they rely on your income, they will still need money after your death and that is exactly what life insurance is there for.
Know who to turn to when disaster strikes
When disaster does strike, it is important that you know who you can turn to and how they can help. Your lawyer is always a good first port of call as they will be able to handle any legal work that an accident or illness may require. You might also consider a specialist personal injury lawyer to represent you such as http://brentadams.com/. As these lawyers deal with similar cases on a day to day basis, they have plenty of experience and can handle your issues.
Your doctor will also be able to help you in a crisis, especially if you are stressed by whatever has happened or need medical attention. Check your medical insurance to see what is covered before you pay, though, and always ask about what payment methods are available to you. There are ways to get help with this type of bill if you are struggling to pay.
Building your safety net is a sensible move that will help to protect you and assist your recovery after a crisis. Whether your house has burnt down or you have been in a car accident, knowing that whatever happens you have some savings to fall back on, insurance that will cover you and professionals who can offer advice is far preferable to facing the trouble alone.